Nichola's SME Tax W-update 14 December 2023

Hello

As 2023 draws to a close, so too does the 2022-23 Self Assessment deadline. Our theme this week is ‘last minute tax returns’ and we feature a number of guides to help answer those last minute FAQs including our top tips of things to consider. HMRC has a new Employer Bulletin and has published its responses to its VAT energy-saving materials relief. We have news of further VAT 'nudge letters', and more letters to taxpayers identified by HMRC through the disclosures made in the 'Pandora Papers'.

Although many of us are very much still focused on the 2022-23 tax year, keep in mind that 31 January 2024 is also the deadline for making a number of claims in respect of earlier years, such as relief for trading losses, and Business Asset Disposal Relief (BADR) for the 2021-22 tax year. We have guides on these topics below which tell you all you need to know.

The end of January is also the deadline to amend 2021-22 tax returns, so check if any provisional figures were submitted last year which still need to be amended, as this can easily be overlooked.

We have a summary of the OOCL UK Branch case, a cautionary tale of 'bah humbug' by HMRC in which a generous payment of bonuses made by a company's ex-chairman to his past employees was found to be employment income and thus subject to PAYE and National Insurance Contributions (NICs).

Thinking of NICs, very soon in New Year, on 6 January 2024, the main rate of primary NICs decreases to 10%. Now is a good time for those involved in payroll to make sure that their software will be updated in time to implement the change.

Finally, in recent weeks we have noted a number of cases before the Tribunals considering the valuation of AIM shares. Our Companies: Share Valuation guide analyses these decisions and the key principles of share valuation. 

More news and updates below, including details of the extension to VAT relief for Energy-Saving Materials which will apply from 1 February 2024.  

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Nichola & the Team

www.rossmartin.co.uk

Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News & Tax Cases (Freeview)  

Employer Bulletin: December 2023 
HMRC have published their Employer Bulletin for December 2023. We have summarised the key content for you, with links to our detailed guidance on the topics covered. 

Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax significant events.  

Former shareholder’s payments to employees were taxable 
In OOCL UK Branch v HMRC [2023] TC09007, the First Tier Tribunal (FTT) found that payments made to employees, funded by a company’s former majority shareholder out of sale proceeds as a gesture of thanks, were made by reason of employment. PAYE and NICs applied.

Nudges: Pandora papers, online sellers & take-aways
In the closing days of 2023 HMRC is sending out more 'nudge letters' to different types of taxpayer and business. These include further letters to taxpayers identified via the disclosures known as the 'Pandora' papers who are suspected of concealing unreported income and gains and two new different VAT nudges

Editor's Choice (subscribers)

Companies: Share Valuation
UPDATE: a string of tribunal decisions in the last two years provide sound guidance on the principles of share valuation for unlisted and AIM shares. We summarise their findings and link back to the original decisions.

A Notice to file a tax return: s.8(1) TMA 1970
Have you received a Notice to File a tax return? This guide explains the issues and what happens if an individual ignores that notice.

Top tips for last-minute tax returns
This guide is a summary of top tips for dealing with last-minute tax returns; what not to forget and how to protect against enquiries. 

Tax Tools 

Tax calculators
UPDATED for NICs changes: FREE for subscribers: We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes. 

Tax Tools
FREE add-on for subscribers, or available separately

Guides & Updates (subscription content)

Self-Employed  

Flat (fixed) rate expenses or actual cost toolkit
What types of expenses can I use fixed-rate expense deductions for? Which is better, fixed-rate deductions or actual cost?

Losses, trade losses and sideways relief
How can trade losses be utilised? What are the restrictions?

Partnerships

When does a partnership exist?
When does a partnership exist? Why does it matter? What are the implications for different taxes?

Disputed profit share: What do I put in my return?
Partners are assessed on the profits that they are allocated on the partnership tax return. What happens when there is a partnership dispute?

Employers

Staff parties and annual functions
This Practical Tax Guide looks at the tax treatment of parties, including Christmas parties and other annual functions for staff from the perspective of the employer and their business.

Cycles & cyclist's safety equipment
What tax breaks are available to you and your staff if you provide your workforce with eco-travel solutions?

Directors & Companies 

Can I charge my company rent for use of my home?
UPDATE: Can I charge my company rent? Under what circumstances, and what expenses can I claim? Can I offset my mortgage? This is a guide to the tax considerations and implications of charging your company rent for the use of your home.

Interest relief: Making a loan to a close company
An individual can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose? How to claim the relief.

Private Client & Estate Planning

CGT: Date of acquisition or disposal
UPDATE: When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?

Business Asset Disposal Relief (Entrepreneurs' Relief): Disposal of shares or securities in a company
When can you claim Business Asset Disposal Relief (BADR) on a share sale? What is the rate of Business Asset Disposal Relief (Entrepreneurs' Relief)? How do you claim BADR? What case law is there on BADR?

Foreign income and residency pages: FAQs
How do you complete the foreign and residency pages of the Self Assessment return?

Land & Property

Property profits & losses: Toolkit (2023-24)
UPDATE: Our Property Profits & Losses toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual.

Penalties & Compliance

Overpayment Relief
What is Overpayment Relief? When can you claim Overpayment Relief? What are the conditions for a claim for Overpayment Relief? What are the time limits for a claim for Overpayment Relief?

Special Relief
What is Special Relief? When does it apply? Does Special Relief have a time limit to claim? 

Capital Allowances

Disposal values & rules
What is a disposal for capital allowance purposes? What is the tax consequence of a disposal? What value needs to be accounted for on a disposal? 

VAT News & Cases

VAT and Energy-Saving Materials consultation responses 
HMRC have published responses to their call for evidence, 'VAT energy saving materials relief – improving energy efficiency and reducing carbon emissions'. A variety of responses were received and an extension to the relief is planned.

Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?

Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• CPD: Corporation Tax Part 1: Rates and Challenges
• CPD: Corporation Tax Part 2 Associated Companies
• CPD: Corporation Tax Part 3 Augmented Profits & Marginal Relief

More at CPD Index

CPD Workouts

Two hours of CPD: Unravelling the diverse tax rules over a range of topical subjects

• VtaxP Tax Workouts 2023: AML Essentials update & IHT and Family Investment Company case studies
• VtaxP Tax Workouts 2023: Tax Update for OMBs & Taxing the Digital Nomad

Tax Queries?

UK Agent for registration of Overseas Entities
Do you require assistance in the registration and verification of an overseas entity that owns UK land or property?

Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.  

Missed Last Time's Web-update?

Nichola's SME Tax W-update 7 December 2023

• HMRC helpline to focus on ‘priority queries’
• Disclosure of cryptoasset income & gains
• Consultation responses on Construction Industry Scheme reform  
• Helping to comply with Off-Payroll Working rules
• ChatGPT fluffs tax appeal
• Only basic camping pods qualified for capital allowances
• Compensation for loss of pension rights was earnings 
• VAT DIY housebuilders: new guidance
• IR35: Kaye Adams was self-employed
• SEIS case study: Can directors or employees qualify?
• Tax calculators UPDATE for NICs changes
• Cash or accruals accounting toolkit UPDATE
• Employers' NICs relief for veterans UPDATE
• Full expensing & First Year Allowances UPDATE
• Gift Aid: How it works UPDATE
• Salary 2023/24 (avoiding NICs) UPDATE
• Employers' NICs relief for veterans UPDATE ...More

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